Germany-based logistics company DHL Express plans a major expansion in India to take advantage of the growth and penetration of retail business in the country, by increasing its exclusive outlets and strengthening road network.
The company is set to open 1,000 retail points across the country by 2010, up from the 150 centres that currently offer its products. DHL, which owns an 81.03% stake in Mumbai-based air express and transportation company Blue Dart Express Ltd, will also start at least 100 transportation hubs to help link the company to smaller towns and non-metro cities and towns.
“We will make significant investments for opening retail points and strengthening ground transportation. With the help of Blue Dart, we should be able to connect across the country,” said Daniel J. McHugh, chief executive officer, DHL Express (Asia Pacific). He did not divulge details of the investment, but over the past four years, DHL has invested more than $300 million (Rs1,224 crore) in India including $163 million for the Blue Dart stake.
“There is a synergy in increasing retail points and road networks as we can offer all range of transport products under one roof. Now, customers will have to contact one person in DHL for all services,” McHugh said.
The Indian logistics market is expected to reach $122 billion by 2015 from $45 billion today, according to market estimates. Most firms would like to capitalize on this growth potential by offering complete solutions, but such an effort would be difficult as they would need sizeable fleet and investment, said a Mumbai-based transport analyst, who didn’t wish to be identified.
The strengthening of road network would include creating small and large cargo collection centres and adding more vehicles. DHL serves 17,500-plus cities and towns through Blue Dart. In February 2007, it had announced a restructuring of business in India and South Asia.
“This restructuring will help us to offer better services on trade lanes on these countries and thereby transform us into an end-to-end logistics company. DHL will be able to offer all services such as transportation, freight forwarding, warehousing and other related services,” said Malcolm Monteiro, senior vice-president and area director (South Asia).
It has also introduced a special set of logistics solutions that will take the responsibility for shipments from pick-up to delivery within India, Pakistan, Sri Lanka and Bangladesh.